The Central Plains Group Ukraine company along with investors from Great Britain and Finland plan to build a facility for the waste-free processing of potatoes, particularly potato starch, in the village of Glynyany of the Zolochevsky district in the Lviv region of Ukraine.  The Governor of Lviv Maksym Kozitskiy had met with representatives of the Central Plains Group Ukraine. This announcement was reported by the AgroTimes with reference to the press service of the Lviv Regional State Administration.

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The company is located in Velikoselki of the Kamenka-Bugsky district and is engaged in the cultivation of table and chip potatoes on a total area of ​​700 hectares. In 2020, gross production was about 15,000 tons. Last year, they built potato storage with refrigeration equipment for a capacity of 11,000 tons. This year they are working on the construction of the second stage of a potato storage facility of the same capacity.

The company also plans to increase the area of ​​potato cultivation. It intends to expand its production activities to process the grown potatoes into starch.

“We intend to build a plant for waste-free processing of potatoes, in particular for starch, in Glynyany of the Zolochevsky district,” said Oleg Drin, a representative of the board of directors of the company and the Finnish investment fund. “The cost of construction is about $7 million. We want to create about 50 jobs at the enterprise. We plan to process 40,000-50,000 tons of potatoes per year. For the profitable operation of the plant, there is a great need for raw materials. We plan to establish cooperation with local farmers and build an effective process for growing and supplying raw materials to the plant. There are plans to cooperate with USAID on the development of farming and, in the future, to establish the process of purchasing potatoes from farmers.”

Сообщение Waste-free potato processing facility to be built in the Lviv region of Ukraine появились сначала на EastFruit.

Continental Farmers Group, one of the largest potato producers in Ukraine, announced the start of construction of a new potato storage facility in the village of Chukva in the Sambir district of the Lviv region. The new modern potato storage facility is designed to store 16,000 tons of tubers and they can be stored for up to 10 months, if necessary. The new storage facility will store potatoes grown by Continental in the neighbouring fields of the Sambir cluster.

According to EastFruit analysts, this is the potato market’s response to the shortage of quality potatoes in Ukraine. Last season up to half a million tons of potatoes were imported to Ukraine mainly from Russia. Also, in the 2020/21 season, potato imports continue to remain high as well as their prices.

We wrote about the reasons for the high import of potatoes to Ukraine as well as why it will be difficult for Ukraine to quickly get rid of import dependence in the article “Dirty potatoes on supermarket shelves as an indicator of problems in the vegetable industry in Ukraine.”

In 2020, Continental Farmers Group grew potatoes on an area of ​​1,600 hectares and, in 2021, it plans to harvest from an area of ​​2,000 hectares. Thus, the company will increase its area by 400 hectares and will be able to collect as many additional potatoes as the new storage will hold (i.e., from 15,000 to 18,000 tons). Provided that the average price for potatoes in Ukraine does not decrease, Continental will be able to earn about $4 million from the sale of these potatoes.

Read also: 10 billion to a landfill? Why cheap dirty potatoes are expensive for consumers, farmers, and supermarkets

At the moment, the production of the necessary design documentation has been completed and the installation of concrete structures for metal supports for the warehouse has begun. At the same time, the acquisition of refrigeration, ventilation, and other equipment is taking place. Continental plans to complete the construction of a potato storage facility in Chukva by August 2021 so that the next potato crop can be placed in the new storage facility.

According to the company itself, the development of potato growing for the Continental Farmers Group remains a priority. Continental grows chips, seeds, and food varieties on its own fields in the Lviv and Ternopil regions.

Сообщение Ukrainian potato producer Continental expands area and storage capacity for potatoes появились сначала на EastFruit.

Economist of the Investment Department of the Food and Agriculture Organization of the United Nations (FAO) Andriy Yarmak for the Comments.ua edition commented on several experts’ statements that the problem of storing vegetable crops is acute in Ukraine.

“Talking about vegetables, if the statement that the problem of storing them “is acute” was true, then we would not have had extremely low prices for vegetables and potatoes (below the cost of growing) for three years in a row, after which many manufacturers got out of this business entirely.

The rise in prices for some types of vegetables and potatoes in the last and the year before last was precisely the result of the fact that many producers left this business.

Also, if there was even a grain of truth in this statement, we would not have a situation every three seasons, when in the spring, onions, carrots, and other goods are simply thrown into a landfill after storage, because no one needs them even for a penny,” the expert explains.

According to Andriy Yarmak, there are enough storage capacities in Ukraine, but there are many storage problems. And they start with the fact that vegetables and potatoes are not stored by themselves. It is not enough to build the most modern storage facility to preserve the products. The specialist believes that it is necessary to change the growing technology and adapt it for growing vegetables and potatoes for storage. “Besides, you need to learn how to remove them on time, you need to know how to store and modify them properly.

Also, the problem is that our storage capacities are unevenly distributed. There are many small producers, and they either have no storage facilities at all, or they are primitive and inefficient. The reason is banal – it is not profitable for a small entrepreneur to build storage. Effective modern storage starts from 1500 tons of one-time storage, taking into account the project’s costs and infrastructure for the storage.”

Andriy Yarmak highly appreciates the fact that FAO, EBRD, and industry associations “have moved the block of cooperation from their place and were able to convince everyone to adopt the new Law.” However, this is only the first small step.

“Shifts in the minds take a long time, and it is necessary, first of all, for the state to do this because the main sellers of vegetables and potatoes (they also store products) in the world are cooperatives.

You also need to understand that a vegetable storage or potato storage cannot be a separate business because it never pays off. The fact is that prices in spring can be even lower than during harvesting. And if you bought for 1 UAH and sold for ten kopiyka coins, then, obviously, the business is unprofitable. After all, there are still considerable operating costs. Thus, storage is always an integral part of the business of growing and selling vegetables and potatoes,” claims Andriy Yarmak.

“And the main thing is that the problem of vegetable growing and potato growing is the lack of systematic work on export,” the expert said. “Without export-oriented projects, we will always have a price swing because vegetables are an inexpensive product. If there are a little fewer vegetables than is needed for the domestic market, you have to import, which means you have to pay for shipping, traders’ margin, which results in rapidly increasing prices. If there are a little more vegetables, then the situation is even worse when no one knows how to export, and they are taken to the landfill,” the expert explained. 

The economist of the FAO Investment Department emphasizes that the organization of exports should start with the study of promising markets, market windows, consumer preferences. And then, customization of the production, storage, packaging, and logistics come to the fore. There is a need to build long-term relationships with customers.

“Why are there carrots from Australia and potatoes from the USA in Dubai, but no Ukrainian products? Why did we once begin to conquer Poland onions market, but now we have almost completely left the world market? Why are the products of such terrible quality even in our stores (not all, but mostly)?

Thus, storage isn’t a problem at all. There is enough capacity, but there is no system, no strategy, and very few systemic enterprises,” sums up Andriy Yarmak.

Сообщение Andriy Yarmak: There are enough capacities for storing vegetables in Ukraine, but there are many storage problems появились сначала на EastFruit.